EBRD to provide finance THE BOARD of governors at the European Bank for Reconstruction and Development (EBRD) agreed at its meeting on Friday to grant Egypt the status of “country of operations.” The status means that Egypt is now allowed to use the bank's ordinary capital resources for operations. It also increases the scope of EBRD's activities and investment in the country, as well as its participation in future development plans. The new status is set to increase the bank's funding portfolio in Egypt to one billion euros annually in the shape of loans to the private sector, including small- and medium-sized enterprises, and the financing of joint ventures between the private and public sector. EBRD agreed to grant Egypt the status of “country of operations” at a meeting in London last month. Friday's approval by the EBRD's board of governors makes it official. Exports down EGYPT's non-oil exports declined to $13.9 billion in the first nine months of 2015, down from $17. 2 billion in the same period last year, according to figures issued by the Ministry of Trade and Industry. The decline has touched almost all exports sectors, with the value of Egypt's food industry exports being down by around 11 per cent to reach $1.9 billion in the same period, while receipts from agricultural exports fell to $1.7 billion, compared to $1.9 billion in the same period in 2014. Egypt's fertiliser exports also declined by LE2.1 billion (around $250 million) to LE1.4 billion (around $175 million) in the first nine months of 2015, compared to LE3.5 billion (around $430 million) during the same period in 2014, according to a report issued by the Chemicals and Fertilisers Export Council. Chemicals and building materials' exports dropped by 34 per cent and 25 per cent, respectively, between January and September this year compared to the previous year. The decline is attributed to a combination of two factors; namely, fuel shortages and the foreign currency crunch. Difficulties in obtaining hard currency to import raw materials have hit industry hard, with Egypt's foreign currency reserves down from $36 billion on the eve of the 2011 Revolution to $16.3 billion in September 2015. The appreciation of the Egyptian pound by around 10 per cent against the euro since the middle of last year has further dented the competitiveness of exports to the euro zone, which receives around a quarter of Egypt's exports. For more than a year, many factories have slowed production, with some plants shutting down because of energy shortages. The government has been diverting fuel to power plants due to the shortage of fuel. The notable decline in export values and an increase in import payments caused Egypt's trade deficit to increase by 38.8 per cent to LE34.7 billion ($4.4 billion) in July from LE25 billion ($3.1 billion) in the same month last year, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS). The Egyptian pound was devalued by the Central Bank of Egypt through regular currency auctions to reach LE8.03 to the dollar in October 2015, compared to LE7.14 in July 2014. Tarek Kabeel, the minister of trade and industry, announced that the government will work to address the issues behind the decline in exports and secure fuel to help factories operate at full capacity.
